Wednesday, March 04, 2009

The single best third-party App on the iPhone (or the iPod Touch) showed up today, at least in the view of this avowed book geek. As a long-time fan and user of Amazon's Kindle (and now Kindle 2), and now an eager user of the new free Kindle iPhone app from Amazon, I heartily recommend people try this new App out, whether they own a Kindle or not. Walter Mossberg describes all of this well in detail in this review today:

"As I predicted in my review of Amazon.com’s Kindle 2 e-book reader
last week, the giant bookseller has moved quickly to make the 240,000
book Kindle catalog available on other devices. On Tuesday night, the
first Kindle software reader appeared, and it’s a free iPhone app.
Called Kindle for iPhone, the app replicates the basic book-reading
functions of the hardware Kindle device, and can be thought of as a
complement to that device, which has more features. However, you don’t
have to own a hardware Kindle to use this app. You can now choose
instead to use your iPhone or iPod Touch as the reader for books from
Kindle’s catalog."

He goes on to add:

"...it is a solid basic app for reading books, and is especially valuable
if you already own a hardware Kindle, as I do. In my brief tests, the
iPhone app synchronized rapidly and perfectly with my purchased library
of Kindle books on Amazon’s servers, and allowed me to retrieve a
previously purchased e-book, without paying again, just as my hardware
Kindle does. It also synchronized to the furthest page I had read in
that book on my Kindle. After reading for awhile on the iPhone, I
performed that process in reverse, and my Kindle took me to the same
spot where I had quit reading on the iPhone."

CNET has another review of the software worth reading with some additional details.

I'd add that Kindle books, at least for now, are generally less expensive to buy than their physical counterparts, partly due to Amazon subsidizing many titles. Most of them are available for $9.99, with many paperbacks available for far less.In addition, since the iPhone is generally with me at all times, it's very convenient for a quick access to any book in my library I'd like to peruse at will.With free samples of many books available for download on to an iPhone/iTouch, I'd recommend giving the free Kindle App a try.

Tuesday, March 03, 2009

David Brooks potentially hits a chord for a lot of moderates with this piece titled "A Moderate Manifesto", starting with this introduction:

"You wouldn’t know it some days, but there are moderates in this country
— moderate conservatives, moderate liberals, just plain moderates.

We
sympathize with a lot of the things that President Obama is trying to
do. We like his investments in education and energy innovation. We
support health care reform that expands coverage while reducing costs.

But the Obama budget is more than just the sum of its parts. There
is, entailed in it, a promiscuous unwillingness to set priorities and
accept trade-offs. There is evidence of a party swept up in its own
revolutionary fervor — caught up in the self-flattering belief that
history has called upon it to solve all problems at once.

So
programs are piled on top of each other and we wind up with a
gargantuan $3.6 trillion budget. We end up with deficits that, when
considered realistically, are $1 trillion a year and stretch as far as
the eye can see. We end up with an agenda that is unexceptional in its
parts but that, when taken as a whole, represents a social-engineering
experiment that is entirely new.

The U.S. has never been a
society riven by class resentment. Yet the Obama budget is predicated
on a class divide. The president issued a read-my-lips pledge that no
new burdens will fall on 95 percent of the American people. All the
costs will be borne by the rich and all benefits redistributed
downward."

Strong words, indeed. He goes on to describe the predicament for a lot of folks who may cast themselves as moderates:

"Moderates now find themselves betwixt and between. On the left, there
is a president who appears to be, as Crook says, “a conviction
politician, a bold progressive liberal.” On the right, there are the
Rush Limbaugh brigades. The only thing more scary than Obama’s
experiment is the thought that it might fail and the political power
will swing over to a Republican Party that is currently unfit to wield
it."

And offers a potential call to arms:

"We moderates are going to have to assert ourselves. We’re going to
have to take a centrist tendency that has been politically feckless and
intellectually vapid and turn it into an influential force.

The
first task will be to block the excesses of unchecked liberalism. In
the past weeks, Democrats have legislated provisions to dilute welfare
reform, restrict the inflow of skilled immigrants and gut a voucher
program designed for poor students. It will be up to moderates to raise
the alarms against these ideological outrages.

But beyond that,
moderates will have to sketch out an alternative vision. This is a
vision of a nation in which we’re all in it together — in which burdens
are shared broadly, rather than simply inflicted upon a small minority.
This is a vision of a nation that does not try to build prosperity on a
foundation of debt. This is a vision that puts competitiveness and
growth first, not redistribution first.

Moderates are going to have to try to tamp down the polarizing warfare that is sure to flow from Obama’s über-partisan budget. "

The whole piece is worth reading, even for those on either side of an increasingly stuck-in-the middle moderate.

Saturday, February 28, 2009

As a Berkshire Hathaway investor, I like many had been looking forward to Warren Buffett's letter to shareholders, out today. The news as one might expect in these unprecedented times, was not good, but the long-term perspective as usual, was most welcome and refreshing.

A common metric Berkshire uses to track performance, book value per
share, fell 9.6% in 2008, its biggest decline since Mr. Buffett took
over the company in 1965.

It was only the second year in more than 40 years that Berkshire
posted negative results. In 2001, Berkshire's book value per share fell
6.2%. The company's performance in 2008 still far outpaced the Standard
& Poor's 500-stock index, which fell 37% last year, including
dividends."

If pressed for time, I'd also recommend the WSJ's summary of the Highlights. A couple of sobering ones that they highlight is the following:

"In poker terms, the Treasury and the Fed have gone 'all in.' Economic
medicine that was previously meted out by the cupful has recently been
dispensed by the barrel. These once-unthinkable dosages will almost
certainly bring on unwelcome aftereffects..."

"Local governments are going to face far tougher fiscal
problems in the future than they have to date. The pension liabilities
I talked about in last year's report will be a huge contributor to
these woes. Many cities and states were surely horrified when they
inspected the status of their funding at yearend 2008. The gap between
assets and a realistic actuarial valuation of present liabilities is
simply staggering.

"The investment world has gone from underpricing risk to overpricing it. This change has not been minor; the pendulum has covered an extraordinary arc.

A few years ago, it would have seemed unthinkable that yields like today’s could have been obtained on good-grade municipal or corporate bonds even while risk-free governments offered near-zero returns on short-term bonds and no better than a pittance on long-terms. When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s.

But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary."

One of my favorites from this year's letter was the following:

"Approval, though, is not the goal of investing.

In fact, approval is often counter-productive because it sedates the brain and makes it less receptive to new facts or a re-examination of conclusions formed earlier.

Beware the investment activity that produces applause; the great moves are usually greeted by yawns."

Here's to more yawns for all of us, large and small.

The whole letter (PDF) is worth reading in it's entirety, especially this year over all others.

Wednesday, February 25, 2009

Alright, so the secret to losing weight consistently was finally revealed today, and it's a surprise. Ready? Here's the LA Times teeing it up:

"Two decades after the debate began on which diet is best for weight
loss, a conclusion is starting to come into focus. And the winner is .
. . not low-carb, not low-fat, not high protein but . . . any diet.That
is, any diet that is low in calories and saturated fats and high in
whole grains, fruits and vegetables -- and that an individual can stick
with for a lifetime -- is a reasonable choice for people who need to
lose weight. That's the conclusion of a study published online
Wednesday by the New England Journal of Medicine, research that
represents the longest, largest and most rigorous test of several
popular diet strategies."

OK, so maybe not too much of a surprise, but at least it tries to settle it once and for all. And reveals a couple more tidbits to boot:

"The study refutes the notion that any one nutrient has a special power
to accelerate weight loss, said Dr. Frank M. Sacks, lead author of the
study and a professor of cardiovascular disease prevention at Harvard.
"We used to think there could be a biological effect of certain diets.
That is probably not true."There may be a strong behavioral
effect in the success of a diet, however. The people who attended
two-thirds or more of the counseling sessions over the two years lost
an average of 22 pounds, compared with the average loss of 9 pounds. The
study was highly anticipated because previous research on diets over
the last two decades has come to dramatically different conclusions."

As someone who has lost and gained weight so many times over time can attest to, the piece lays out what it takes in a common sense way. Having worked down this familiar path once again over the last few months, and lost a third of my previous body weight, there's only one other thing I'd add to the article: don't forget to exercise, even modestly, at least three times a week. There are no secrets here, just changing one's habits, staying positive and being consistent.

Wednesday, February 18, 2009

Thomas Friedman has yet another notable op-ed from his current trip to India.

In a piece titled "No way, no how, not here", he writes about India's muslim community collectivly refusing to allow the burial of the 9 assailants in the Mumbai attacks on November 26th, 2008, in the main Muslim cemetery in Mumbai. That multi-day attack took the lives of 173 people and injured over 300. This excerpt from the piece in particular stood out:

""Indian Muslims are proud of being both Indian and Muslim, and the
Mumbai terrorism was a war against both India and Islam," explained
M.J. Akbar, the Indian-Muslim editor of Covert, an Indian investigative
journal. "Terrorism has no place in Islamic doctrine.

The Koranic term
for the killing of innocents is 'fasad.' Terrorists are fasadis, not
jihadis. In a beautiful verse, the Koran says that the killing of an
innocent is akin to slaying the whole community. Since the ...
terrorists were neither Indian nor true Muslims, they had no right to
an Islamic burial in an Indian Muslim cemetery."

He goes on to put this in a broader context:

"To be sure, Mumbai's Muslims are a vulnerable minority in a
predominantly Hindu country. Nevertheless, their in-your-face defiance
of the Islamist terrorists stands out.

It stands out against a dismal
landscape of predominantly Sunni Muslim suicide murderers who have
attacked civilians in mosques and markets - from Iraq to Pakistan to
Afghanistan - but who have been treated by mainstream Arab media, like
Al Jazeera, or by extremist Islamist spiritual leaders and Web sites,
as "martyrs" whose actions deserve praise.

Extolling or excusing suicide militants as "martyrs" has only led to
this awful phenomenon - where young Muslim men and women are recruited
to kill themselves and others - spreading wider and wider.

What began
in a targeted way in Lebanon and Israel has now proliferated to become
an almost weekly occurrence in Iraq, Afghanistan and Pakistan.

It is a threat to any open society because when people turn
themselves into bombs, they can't be deterred, and the measures needed
to interdict them require suspecting and searching everyone at any
public event. And they are a particular threat to Muslim communities.
You can't build a healthy society on the back of suicide-bombers, whose
sole objective is to wreak havoc by exclusively and indiscriminately
killing as many civilians as possible.

If suicide-murder is deemed legitimate by a community when attacking
its "enemies" abroad, it will eventually be used as a tactic against
"enemies" at home, and that is exactly what has happened in Iraq,
Afghanistan and Pakistan.

The only effective way to stop this trend is for "the village" - the
Muslim community itself - to say "no more." When a culture and a faith
community delegitimizes this kind of behavior, openly, loudly and
consistently, it is more important than metal detectors or extra
police. Religion and culture are the most important sources of
restraint in a society.

That's why India's Muslims, who are the second-largest Muslim
community in the world, after Indonesia's, and the one with the deepest
democratic tradition, do a great service to Islam by delegitimizing
suicide-murderers by refusing to bury their bodies. It won't stop this
trend overnight, but it can help over time."

Tuesday, February 17, 2009

Barron's this weekend featured an interview with Robert Albertson, a veteran banking analyst on Wall Street (Disclosure: I had the pleasure of working with Robert for many years at our former firm, Goldman Sachs).

His thoughts on the financial markets are worth reading, especially as President Obama signs the trillion dollar stimulus package in Denver today. Here's the section from the interview that came to mind as one sees the images from Denver:

"How effectively has the government responded to this crisis?

I'm seeing very odd
interpretations from the government, in particular about what we need.
The government isn't thinking about deleveraging. The government is
talking about jump-starting consumer credit. I hear the word jump-start
all the time. It is such a bad word. Jump-start consumer credit for
what? So we can be more indebted?

So what has to be done?

We need to reduce the debt.
If you jumpstart credit, you are just going to prolong the problem and
deepen it. What we need now is the patience to de-lever. We don't need
the stimulus package. We need a savings package, but that couldn't be
further from the goals at the moment. The mistake is that the
government believes credit drives the economy, instead of the economy
driving credit. They have got that backward, and this is a very
dangerous time to be misfiring..."

"...What is the biggest danger of the stimulus plan?

That it will be a false
start. It will be priming a pump that still has an empty well
underneath. It will stop again even harder, and we will be further in
debt and have further problems in the financial system from that debt..."

"...It looks like the stimulus package, whatever form it finally takes, will include some tax cuts along with a lot spending.

As I said, there is at least
$2.5 trillion that has to come out of consumer spending in order to pay
down debt and build savings. If you want to replace that $2.5 trillion
with the government, they are only at around $800 billion. No. 2, going
back to the economic stimulus of early 2008, we now recognize that the
bulk of it wasn't spent; it was saved. So you can split this package
any way you want. It isn't going to give the desired effect. It is
going to give a false small blip, although it could give us a spike."

"The U.S. Greeting Card Association
estimates that approximately one billion valentines are sent each year
worldwide, making the day the second largest card-sending holiday of
the year, behind Christmas.

The association estimates that, in the US, men spend on average twice as much money as women.[3]

"Valentine's Day spending is expected to drop this year to $28.6
billion, or 4.8 percent below last year, according to IBISWorld Inc."

But the overall numbers aside, Valentine's Day is of course really about communicating one's feelings to the special women in one's life. In that context, this "geek poem" unearthed by Kara Swisher bought a smile to my face:

"Tomorrow is Valentine’s Day, of course, so here’s a lovely sentiment on a T-shirt from the fine folks at ThinkGeek."

Well said indeed.

But remember Guys, you've got to do a little more than a Geeky T-shirt in expressing how you really feel.

Wednesday, February 11, 2009

Surprise, surprise, the market didn't seem to like the plan of action rolled out by our new Treasury Secretary Timothy Geithner today, and the re-assuring statements made by our Fed chairman in Congress. As the WSJ notes:

"The strength stocks showed last week vanished on Tuesday after
Treasury Secretary Timothy Geithner did little to slake traders' thirst
for details on the U.S.'s plans to aid ailing financial institutions.

Investors also shrugged off the Senate's approval of an $838 billion
fiscal stimulus package and testimony by Federal Reserve Chairman Ben
Bernanke, who assured lawmakers that 95% of the Fed's nearly $2
trillion balance sheet is "gold-plated secure."

Reading through these news reports, just feels like more of the same old debate we've been having for months now, as we wait for the water torture of the inevitable to end sometime soon. The media-circus optimized "debates" around pork and political agendas masked as "stimulus", all tucked into an unprecedented trillion dollar plus blank check, are disconcerting to most citizens from either side of the aisle. And this is especially true if you're an investor, large or small, public or private, U.S. or foreign.

If you compare this bear market to the last three big ones of the last century (see chart), we seem to be a about where we were in the '73-'74, and '00-'02 bears, but only half-way down as compared with the Big ones of '29-'32. It's really tough to say whether this is the bottom, or it's still a lot further down.

The frustrating thing for the markets, is not hearing any new "stimulus" solutions, and seeing more and more being added to the tax-payer's tab. Which of course should make us extremely uncomfortable as citizens and parents.

So even out-of-the box solutions like the one proposed by Thomas Friedman in a tongue-of-cheek sort of way in a piece titled "The Open-Door Bailout", is a bit of fresh air*:

"Leave it to a brainy Indian to come up with the cheapest and surest way to stimulate our economy: immigration.

“All
you need to do is grant visas to two million Indians, Chinese and
Koreans,” said Shekhar Gupta, editor of The Indian Express newspaper.
“We will buy up all the subprime homes. We will work 18 hours a day to
pay for them..."

While his tongue was slightly in cheek, Gupta and many other Indian
business people I spoke to this week were trying to make a point that
sometimes non-Americans can make best: “Dear America, please remember
how you got to be the wealthiest country in history. It wasn’t through
protectionism, or state-owned banks or fearing free trade. No, the
formula was very simple: build this really flexible, really open
economy, tolerate creative destruction so dead capital is quickly
redeployed to better ideas and companies, pour into it the most
diverse, smart and energetic immigrants from every corner of the world
and then stir and repeat, stir and repeat, stir and repeat, stir and
repeat.”

Obviously this idea seems a non-starter in the current anti-immigration environment in this country, not to mention non-intuitive in the face of one of the worst recessions in recent memory. I've been noodling along these lines for some time now. And something as seemingly crazy as this, changes a lot of the global rules, and just might work. Food for thought.* Image source.

Tuesday, February 10, 2009

Sometimes it's easy to forget that useful gadgets need not have the
latest whiz-bang technology and a ton of bells and whistles. Sometimes
it's just about a gizmo that provides some needed functionality to make
every-day life a little easier.

That's what ran through my mind when a
fellow passenger spilled some Starbucks coffee on me, while trying to
get in his airline seat next to me.

In this day and age of airlines cutting back on food and beverage
services, and encouraging passengers to bring their own, the need for
simple things like cup-holders in a seat seem like no-brainers. Trust
the markets to address this need, as this Washington Post article notes:

The Cup-Pilot, designed by a former Vermont secretary of
transportation, attempts to stop the spills by keeping the beverage
where it belongs: inside the container.

The collapsible contraption resembles a basketball hoop for Team
Smurf, with a small net pouch attached to a plastic "backboard." A
metal hook fastens to a number of surfaces, including luggage, airplane
trays (open and closed) and your spouse's finger.

Although this item
might seem a bit excessive, much like lipstick holders, it does come in
handy in flight. We imagine using it while settling into our seat, when
our arms are otherwise busy storing a carry-on, and at high altitudes,
when we have important papers and gadgets arrayed on our tray table and
don't trust the shallow indentation to do its job. Think of how happy
your boss will be when you deliver a report not smelling of bloody
mary.